EchoStar Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 6, 2023

There are 7 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the EcoStar Corporation Third Quarter 2023 Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would like now to turn the conference over to Dean Manson, Chief Legal Officer.

Operator

Please go ahead.

Speaker 1

Thank you, Michelle. Hello, everyone, and welcome to our earnings call for the Q3 of 2023. I'm joined today by Hamid Aqaban, our CEO and President Paul Gasky, our Chief Operating Officer Jeffrey Boggs, Senior Vice President of Finance and Veronika Tokach, our Chief Accounting Officer. As usual, we invite media to participate in a listen only mode on the call and ask that you not identify participants or their firms in your report. We also do not allow audio recording, which we ask that you respect.

Speaker 1

All statements we make during this call other than statements of historical fact constitute forward looking statements made pursuant to the Safe Harbor provided by the Private and securities litigation Reform Act of 1995. These forward looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results and from any future results expressed or implied by the forward looking statements. For a list of those factors and risks, please refer to our annual report on Form 10 ks for the year ended December 31, 2022, filed on February 23rd and our subsequent filings made with the SEC. All cautionary statements we make during the call should be understood as being applicable to any forward looking statements we make wherever they appear. You should carefully consider the risks described in our reports and should not place any undue reliance on any forward looking statements.

Speaker 1

We assume no responsibility for updating any forward looking statements. We refer to adjusted EBITDA during this call. The comparable GAAP measure and a reconciliation thereto are presented in our earnings release. I'll now turn the call over to Hamid.

Speaker 2

Thank you, Dean, and good day, everyone. Our agenda for the call today is as follows. 1st, we'll provide a brief overview of financial activity from the Q3. After that, we'll discuss our business strategy, which includes the 3 parallel work streams that I call Horizon's and our progress on all three. We'll then move to question and answer session.

Speaker 2

But before we jump into the Q3 results, let me briefly highlight the announcements Our contract award with Delta Airlines signed in the Q4 that will set Prostar among the leading in flight connectivity providers. Delta is known to be an industry leader with in flight connectivity service and for conducting extensive competitive procurements. We are thrilled to have earned their confidence in being selected as a new Delta partner. This new order is a major opportunity was In the in flight communications market that will increase our backlog and diversify our business. This is consistent with my statements in prior earnings calls regarding our As we have anticipated nearing the end of Horizon 1, the 3rd quarter marks our low point as we enter our historically strong Q4.

Speaker 2

Our revenue in the Q3 of 2023 was $413,000,000 lower by $84,000,000 compared to the same period of the prior year. The revenue decrease in the Q3 was partially driven by our Consumer broadband business, which continues to be impacted by capacity constraints and other factors as we wait for our Jupiter 3 satellite to begin service. We also had a decrease in our enterprise revenue primarily due to lower domestic and international deployments and shipments which we expect to recognize in the Q4 and beyond. As I have shared before, Most enterprise orders are recognized over several years, which we can create some variation or irregularity in our revenue profile as We saw with the low point in the Q3. We remain excited about opportunities within the enterprise market, a market that we believe will continue to allow us to better diversify our business both domestically and internationally and provide cash generation through low capital investment and scalable operating leverage.

Speaker 2

We are enthusiastic about our recent performance and a number of near term prospects in the enterprise market and see that leading to an estimated enterprise backlog approaching $2,000,000,000 Our adjusted EBITDA in the Q3 was $126,000,000 a decrease of 21% from last year, primarily driven by the lower revenue. We continue to Focusing on managing our costs to align with the change in the revenue mix to preserve our ability to generate cash. Capital expenditures net of receipt of refunds in the quarter was $79,000,000 compared to $61,000,000 in Q3 of last year. The increase was primarily due to increase in expenditures on the J3 satellite program. Operating cash flow defined as adjusted EBITDA CapEx was $47,000,000 during the quarter, dollars 51,000,000 lower than Q3 of last year.

Speaker 2

We ended the quarter with $2,000,000,000 of cash and marketable securities. I remain confident about our strategic direction and expectation and execution plan and our ability to generate healthy returns and cash to execute on many opportunities that are ahead of us. Let me now turn the call over to Paul, who will provide some additional specifics on the quarter and our Horizon 1 and 2 activities.

Speaker 1

Thank you, Hamid. Under our Horizon strategy that we have previously explained is dividing our strategic focus into We are about to enter our Horizon 2 as JUPITER 3 comes into service later this quarter. We will begin to focus on deploying the next Generation HughesNet service across the Americas and continue the expansion of our global enterprise business, including the government sector and our managed services portfolio. During this midterm period, we also expect to be launching our hybrid LEO GEO Enterprise solutions as well as leveraging our own manufactured products to pursue growth and further diversification. JUPITER3 reached its orbital slot earlier in Q3.

Speaker 1

The Maxar team has fully deployed all of its antennas and Jupiter-three is on track to begin transmission testing with our extensive ground system shortly. And we expect the satellite to enter into service in December. Once in service, JUPITER 3 will deliver new broadband services in North and South America and will allow us to focus quickly on addressing the continued demand for high speed broadband service throughout the region. In preparation for the start of Jupiter 3 service, our consumer team is finalizing the development of new service plans with higher speeds We believe the market is eager for these robust offerings and we continue to compete with an attractive portfolio of service plans that will be simple to understand, aligned to our customers' needs. The market has reacted well to our Fusion service offering.

Speaker 1

We continue to see considerable percentage of our new subscribers by existing and new subscribers and we expect to expand the service to help attract new customers and improve our overall economics as we launch Jupiter 3 service. While preparing for the launch of Jupiter 3, we remain focused on operational efficiencies, Yield optimization of our North America satellite capacity and further optimization of our subscriber acquisition strategies. Additionally, we continue to improve our cost and performance through the deployment of AI and ML automation, improved processes, Supply efficiencies, of course, not compromising the end user experience. Moving to our North American Enterprise business, We are entering Horizon 2 with a very significant achievement. As Hamid mentioned, we are thrilled to have completed a contract with Delta Airlines to deploy our Hughes in flight connectivity solution to deliver Wi Fi and video services to passengers on more than 400 Boeing 717 and Regional Jets serving North America.

Speaker 1

Our solution utilizes the Jupiter satellite assets in a very innovative way to provide outstanding in cabin communication service. We've been working extensively with Delta Airlines' team for a number of months and planned initial installations in mid-twenty 24. This program marks a change in business strategy After more than 20 years supporting numerous in flight communications providers with our equipment support, we are now expanding to offer our unique in flight communications solutions directly to Commercial Airlines. Regarding the Q3 North America Enterprise results, we received several expansion and renewal orders from retailers and upgrade orders in the U. S.

Speaker 1

Retail petroleum market. In addition, Explorer placed a significant order for the terminals that will support their broadband services in Canada using JUPITER3. In our OneWeb program, during the Q3, We continue deliveries of production gateways and systems to meet the OneWeb service implementation plan. We have shipped more than 23,000 Satellite subscriber modules for inclusion in OneWeb modems. We are seeing significant interest in our previously announced electronically steered antennas or EASAs from resellers, distribution partners and direct customers.

Speaker 1

We expect factory shipments to begin this quarter with initial units going to OneWeb for their customers as well as to customers of our managed LEO service offering featuring OneWeb capacity. Our Government and Defense segment had a strong Q3 with follow on orders From the U. S. Postal Service or broadband services in a number of their rural offices, the state of Pennsylvania for broadband services And Boeing for their PTES program along with add ons to our DoD contract supporting the Navy for 5 gs systems enhancements for the Whitby Island Naval Air Station Advanced Flight Line Program, which we had previously delivered in the first half of the year. We also received an order from prime contractor SES Space and Defense in support of a new Air Force multi orbit MEO and GEO program for airborne based communications with software defined networking opened a new era for our defense based communications products.

Speaker 1

Now to our international operations, we expect opportunities in self alcohol and digital inclusion projects to continue to expand Horizon 2 as companies and governments extend their reach to underserved communities. We believe our Jupiter system remains de facto standard in broadband geo satellite communications globally and our new LEO ESA for use on OneWeb allows us to strongly compete for these new opportunities going forward. In Latin America, the new Jupiter 3 capacity will allow us to expand our enterprise services for a number of upcoming such projects. In Mexico, we've seen continued expansion of sell backhaul and digital inclusion projects with additional locations as well as additional capacity. Throughout Latin America, we've added over 1300 schools, leveraging our equipment and Jupiter capacity.

Speaker 1

In Asia, we also see similar opportunities for cell backhaul and digital inclusion projects. As an example, in last quarter in India, we fulfilled a second order from Airtel for 4 gs backhaul, supporting a significant USO project in Maharashtra. We are also upgrading the Indian Army's battlefield surveillance system to Jupiter Technology. While in Central Asia, we are we were awarded and have delivered a Jupiter system that will provide Internet services to remote communities. And in Southeast Asia, we received an order for a Jupiter system for use on a high throughput satellite.

Speaker 1

Lastly, in Latin America Consumer business, we look forward to the commencement of services on Jupiter 3, which is expected in the Q1 of next year. This will allow us to Now let me turn the call back to Hamid.

Speaker 2

Thank you, Paul, For the summary of our Horizon 1 and 2 activities from the Q3 of this year, even though Jupiter 3 has launched successfully, we continue working on all our work streams Horizon 1, 2 and 3 in parallel. As for Horizon 3, it is our longer term strategy to Span into new markets through organic innovation and potential acquisitions. To that end, earlier today, we filed an We expect the S4 to go effective in the coming days and are on track to close the transaction this year. In addition, we continue evolving our S band prospects. As we announced during the Q1, construction of our EchoStar, Lyra, LEO constellation is underway.

Speaker 2

We continue to be on track to launch the first LIDAR satellites In late 2024 or early 2025 to begin offering store and forward Internet of Things, machine to machine and other data services. At the same time, we are developing opportunities for our global S band assets. For example, we continue to bring on new customers In Europe, for our EchoStar Mobile LoRa enabled IoT service and are investing in the development of 3 gspp Release 17 to complement the existing LoRa technology. Let me now turn it over to the operator to start the Q and A session. Thank

Operator

The first question comes from Ric Prentiss with Raymond James. Your line is open.

Speaker 3

Good morning, everyone. This is Brent on for Rick. Thanks for the question. First one, on the DISH deal, what milestones are left for closing the deal? And Hamid, with you set to become DISH CEO next week as opposed to at the deal close, what should we read from that in terms of the merger timeline?

Speaker 2

Brent, Hamid here. I'll start the answer in the second part and I defer to Dean, Was on a call for the first part regarding the milestones. Look, there's nothing more to read regarding my Taking a dual role here, I mean candidly we have very high confidence that the companies will merge And there's really no obstacles that we are aware of that would stand in our way of getting the companies together. Time, It's an opportunity to make sure that we get a good head start for 2024 ahead. As I mentioned, We just passed in EchoStar, we just passed our lowest point of the performance and we hope that the similar Kind of situation develops at this, so we can bring the companies together and look for a much more effective and energetic performance 2024, so I want to just get that head start, there's budgeting process going on, other things going on that would allow me to be better in shape to run the business when the companies are merged.

Speaker 2

Really there's not much more to it to read than the whole ability to at least get the runway And you know started for 2024. Dean, I'll pass it to you regarding the milestones left before the merger closes.

Speaker 1

Sure. Yes. Thanks, Hamid. Brent, yes, it's pretty straightforward from this point onward. We just need to mail The information statement to shareholders wait the prescribed amount of time.

Speaker 1

There are a couple of Small things that remain that should be done well within that time period, such as the pro form a FCC Approval for transfer control of certain licenses. But as we said in our public statements, we fully expect this to be wrapped up by year end.

Speaker 3

Okay. And then you announced an unusual move flipping the structure for the merger, for EchoStar to be the surviving company now. You give us some more detail on the rationale for that? Yes. I'm happy to pick up on that.

Speaker 2

No, go ahead, Dean. Go ahead, please.

Speaker 1

Sure. No, I was just going to add that this really was the result of looking at what's the optimal way to structure The companies that are ultimately going to be merged and operated as one company. So it really wasn't there wasn't any thought of it being one company acquiring the other, although as a strict legal matter, that's the way these things get structured. As we said in the statements we made when we Announced the modified structure, this gives us greater flexibility in terms of Capital and capital allocation and some of the contractual and debt related Restrictions that are in place at the different companies, this creates incrementally more flexibility. So it was just seen as Somewhat better, somewhat more flexible structure, but really exactly the same combined company in the end in terms of how it will be operated and managed.

Speaker 3

Okay. And then lastly, you talked about the in flight connectivity deal with Delta. What drove the decision to enter IFC that's been a competitive market historically? And can you also update us on the progress The Galileo project with Gogo?

Speaker 2

Yes. Let me Say something about the in flight business and certainly we'll ask Paul to embellish and add to that. Look, we have been its use has been In the in flight business since 2012, we just have not been taking the lead position and we have provided solutions through other parties that have served that market. We have been serving A numerous number of airlines globally around the world and so this was just an opportunity for us to step up and become a direct supplier and integrated supplier that can provide end to end all aspects of the service. So this is not a new as I said, it's not a new area for us.

Speaker 2

We understand the market very well. We have been through third parties, we have been supplier to Southwest Airlines, Air France, KLM, Turkish Airlines, Espirit Airlines, other airlines and here now the opportunities here we look at the market, a market that is Today, dollars 1,300,000,000 but is expected to be more than $4,000,000,000 in 2,032. So this is one of the big Growth opportunities in the enterprise business, we find ourselves in a very prime position both from a capacity perspective because of Jupyter's re arrival and also because of all the Great technologies that Hughes team has developed to equip the planes and provide excellent service. Paul, is there anything else you'd like to add with respect to our decision to move to this area?

Speaker 1

No, I think that's the main point. I think underneath that decision, of course, is we have ideally situated assets with the Jupiter fleet, which allows us to provide a good service in the regions that we're discussing right now. And also because of our extensive activities In the LEO space with OneWeb and our antenna technology there, we think that there's some seriously good opportunities Coming up in the near future.

Speaker 3

Okay. And related to that, could you give an update on where you are in the Gogo project and the timeline there?

Speaker 1

Well, I would just say it's going very well and I would I'd have to leave it to Gogo to describe Where they are in timing for their market. So I'll leave it at that, but it is going well.

Speaker 3

Okay. Thanks for the questions, guys.

Operator

Please stand by for the next question. The next question comes from Michael Rollins with Citi. Your line is open.

Speaker 4

Thanks and good morning. A couple of questions if I could. First, The broadband market has evolved significantly since you first started talking about the J3 opportunity. Can you remind us How we should be thinking about how the push to commercial service later this year and into 2024 Can influence subscriber and cash flow results and how much of a possible boost to subscriber performance Should be in the back of our minds. And then just separately, in the SEC filing today for EchoStar, There is a reference that EchoStar may operate DISH Network's business in a different manner from how DISH Network has operated it in the past.

Speaker 4

And just curious if you could unpack that a little bit and share some of your thoughts on You may want to run it differently. Thank you.

Speaker 2

I will make some statements about EchoStar's performance next year, I probably cannot add much more than that S4 has already put on the market. With respect to EchoStar, we expect we certainly expect growth next year, I mean, in a number of consumers that we have. But I am more excited about the significant opportunities that enterprise brings us above that. We have a place in the consumer market that we think is well within the protection of our Pricing and offering that is differentiated and where StarLink is operating and we see the market actually be Very right for the segment that we are addressing. While we are not considering ourselves primarily Tied and dependent on our consumer business as it had been in, I would say many years past, More and more we see in very large opportunities come our way in the enterprise.

Speaker 2

Again, I mentioned during the call that we expect our backlog, enterprise backlog to by end of this year approach 2,000,000,000 That is very significant. As you could see, this is a shift of our business mix towards enterprise. Now enterprise Has lower gross margin, but it has far lower CapEx requirements and has far lower churn in The backlog is over the course of many years and once you are in an enterprise business, you generally expect it to remain there. You remain there for many years, very, very Sustainable business has a long horizon and long life. So we see our business shifting in that direction.

Speaker 2

We clearly see 2024 has a better year than 2023 and in fact 2023 this quarter was the lowest point that we had anticipated and now from here on in fact you will see Improvement in our numbers in all metrics in Q4 even in advance of J3 showing up In terms of revenue, you will see us improving in every metric significantly, particularly in revenue As been historically also the performance of the business. As it comes to DISH, I mean we obviously A combination of 2 companies will have a number of opportunities here for instance the whole enterprise business. The 5 gs, Private 5 gs and enterprise 5 gs will become a significantly better opportunity when we combine our enterprise business here at EchoStar with The capabilities that DISH has, so those opportunities will become more tangible and more real. I can't say much more than what we have said on beyond that CNS for today, just obvious reasons. But I guess I'll stop right there and if there's any more specific narrow questions, I'll be happy to try to answer them.

Speaker 4

Thanks. Maybe just one other follow-up. You mentioned approaching $2,000,000,000 of backlog at the end of this year. I think the Q referenced, if this is the right comparable, dollars 1,500,000,000 of contracted revenue in the backlog as of September 30. So, to close that between the 1.5% and the 2%, if that's the right comparison, is that partly the Delta agreement that you disclosed or are there new other incremental agreements or opportunities that we should be mindful of within that context?

Speaker 2

So we're looking at a number of deals and opportunities. As I said, our enterprise business is facing A significant amount of demand from a variety of sources, obviously in flight business is 1 and there are multiple opportunities there that we're working on And there's other segments that are not related to in flight. I mean, we have deals from Far East and other places that are materializing that are in our mind are very significant. So, that's please take that as a basket. Don't take it as any single deal, But we are quite confident that we are approaching $2,000,000,000 of backlog by end of the year.

Speaker 2

Again, what's really important is not the city, every individual component in that. What's relevant is that our business It's very sustainable and this backlog has vastly grown and we are it could even grow Significantly beyond this as we enter in the 1st couple of quarters of next year, we are working on opportunities that will manifest themselves in that time frame, we expect them to manifest. So it's a gradual shift of our business towards enterprise and a very long horizon of foreseeable revenues and cash flows.

Speaker 4

Thanks. It's helpful.

Operator

And wait for your name to be announced. Please stand by for the next question. The next question comes from Chris Quilty with Quilty Space, your line is open.

Speaker 5

Thanks guys. Congratulations on the Delta RJ deal. That was a surprise Given your past business practice of staying indirect, and it sounds like you're going to make a bigger commercial aviation push and that Opens up the question, your satellite assets are North American based. Do you intend to Build out a global service infrastructure and obviously that would involve partnering for global capacity Or is there a desire to build out that capacity? And then the secondary question to that commercial Aviation market is which band?

Speaker 5

Again, your Ka band, but you're dealing with KU on your LEO strategy and there are no KA Leos that exist today. So that's a lot, but if you can sort of unpack what you're thinking.

Speaker 2

Yes, Chris, remember that we are just we are not purely A connectivity provider as it comes to our services, enterprise services, we provide Significant amount of technical products, antennas, our electrically steered antennas, our software that goes into Many, many satellite operations around the world that use our software and services. So without disclosing too much information that could potentially harm us in a Competitive way, I'd like to say that, while we have direct connectivity of our own satellites In the Americas, we can work with others around the world to provide service and other products to them to make to have a bigger play in the in flight business. So I'll just stop there. But we are definitely a global company. Our footprints connectivity may be one aspect of it, but footprint of our Products and services are global and that's how we think that in the in flight business we can have a play that is bigger Then just the Americas.

Speaker 5

Good. Speaking of the Americas, Jupiter 3 and correct me if I'm wrong, When you guys architected that thing back in 2014, 2015, I mean that was 5 years before Leo, broadband never existed. And I think at the time, the plumbing was sort of optimized for consumer. Does that create any issues for serving the enterprise markets? Clearly, you found a way to operate it in Aviation.

Speaker 5

And I think you made mention of the fact that you did something special in terms of the design. So how flexible is Jupiter 3, if you find the need to

Speaker 2

Paul, perhaps you want to comment on that?

Speaker 1

Yes, certainly. So JUPITER 3, first off, while we had a mission of serving consumers, we also had a major portion of our plan Anticipated aeronautical services as well as other enterprise services. So it's not a new area. Additionally, the way we designed it was to get as much capacity as possible in key areas across the region. And so it does that very effectively.

Speaker 1

We have if you look at the typical in flight service, Probably the biggest obstacle that operations has is serving the hub area cities. And that's where the Jupiter 3 capacity in particular comes in quite handy for serving them. And if you look at our architecture, we actually utilize All three Jupiter satellites, so we have a fabric of capability. So depending on where we are and how much capacity we need, we'll draw on any one of the 3. And so that's how we generally build the system.

Speaker 1

And at the same time, we do have capacity available from some other business partners To help us fill that out in the few areas that we are not covering. So we think we're in pretty good shape with that.

Speaker 5

Speaking of all 3 Jupiter 3, Spaceway is now past its design life. How is that holding up?

Speaker 1

Well, it's within days of being completely decommissioned in the graveyard orbit. So, yes, it's been moving quietly across the arc here over the last month.

Speaker 5

But clearly not Creating any capacity issues given the availability of Jupiter 3?

Speaker 1

No, no. We drained off all of our subscribers early to make sure they had Continuity of service, and so while the Spaceway served us really well, we wanted to make sure Customers got the newer services and we moved them.

Speaker 5

Got you. A quick reference, I think in the transcript you had Shind, you were excited about some defense programs and I missed, it was one tied in with SCS. Can you maybe give a little bit more Color on that particular program, which was it press release? I don't recall seeing it.

Speaker 1

Yes, there was a release for it. Yes, that program It's a very interesting one because the SCS Defense Group has a obviously they have their Empower services which are MEOs And they obviously have plenty of geos. And so we have a modem technology that's accepted by DoD that we blended in with some requirements they had to provide this multi orbit solution. I think they have previously announced this Probably, I don't know, a month or 2 ago, I can probably give you a reference at some point. But yes, it's announced and very interesting, very exciting.

Speaker 1

It's a sample of what is going to be happening as we go forward in the defense space.

Speaker 5

Great. And final question here and you may have already mentioned it in the call, but what is the current timing on both of the antennas For delivery both the OneWeb and Gogo, any change in sort of the development and production there?

Speaker 1

Yes, I think first off, I think I mentioned in the call here a little bit, this quarter we're shipping the OneWeb antennas. They're going really well. They'll leave Those are the fixed antennas and

Speaker 2

we'll be using those in a

Speaker 1

number of places as well as where OneWeb will apply them. And as far as the Gogo antennas go, we're going to leave it to Gogo to respond to the schedules on that, but the program is going very well. The system Looks like it's performing better than we had thought. So we're very happy with that.

Speaker 5

Very good. Thank you, gentlemen.

Operator

Please standby for the next question. The next question comes from David Barden with Bank of America. Your line is open.

Speaker 6

Hey, guys. Thanks so much for taking the questions. I really appreciate it. I guess my questions are for you, Hamid. Given that you'll be the new CEO of DISH in a week, I'm going to bring up the three things that people Really want to know what your perspective is on.

Speaker 6

Issue number 1 is, DISH is paying $100,000,000 To extend the time of the option that they have to buy spectrum from T Mobile In the 800 megahertz band and that's $3,600,000,000 and really no one can figure out how that is going to happen from a funding perspective. The second, I think, question is from the S4. DISH just put up a quarter with less than $100,000,000 of EBITDA, but is now projecting more than $2,000,000,000 of EBITDA 4, how do you plan to make that happen? And then the third question is, DISH was Ideally going to be the 4th facilities based mobile player in America. It's been struggling.

Speaker 6

How are you going to fix it? That'd be great. Thank you.

Speaker 2

Thank you. Naturally, I can't answer any of those questions today, Even unofficially, I don't have detailed knowledge of any of that yet to the point that I can give you meaningful answers. Listen, I clearly understand Net liquidity and cash is prime, prime, prime requirement to the business and a concern of the Lenders and equity holders and I certainly will focus on that, certainly that I do intend to make sure We maximize our use of our capital and not getting the company into deeper Need for cash before we can solve the problems and solve the challenges we have. I think there's a number of avenues That we during the evaluation of the merger that the bankers had identified and that is at hand, I have had the privilege of seeing as a result of the merger documents that gives us some room. So this is not without solutions or without room.

Speaker 2

So certainly that is there, but I can't obviously provide any more detail today. Look, as it comes to Being a competitive provider in the market, today there is no way to get into a mobile business Anywhere in the world, particularly in a market as sophisticated, as large and as expensive as United States before you spend You know, 1,000,000,000 and 1,000,000,000 of dollars ahead of time before you can get your first customer. There's no way. I mean, I've been part of mobile business For the past 35 years at least, going back to the 1 gs and 2 gs and 3 gs and having significant roles in every single one of those. And I can tell you that just the entry point to become a carrier, you got to have Vast coverage, nationwide coverage, a nation the size of U.

Speaker 2

S, you got to buy plenty of a spectrum to even be considered as viable. And you incurred incredible amount of OpEx in terms of leases and backhaul circuits and energy and maintenance and License fees and you name it, all of those come in before you can get to 1st customer. I remember when I was in the AMS business, just a very young engineer, We had 3 or 4 sales in the neighborhood and we considered ourselves completely in business and we launched our 2 gs in the U. S. In 13 different markets.

Speaker 2

Each one of them was just a downtown area and that was acceptable for the consumers at that time that was a luxury. Today you need to spend $30,000,000,000 before you can start selling the first mobile phone on your own network. So I think it's not surprise, there is no surprise that Any entrant and I venture to guess that in many markets there will never be a new mobile entrant. There won't be. I mean DISH may be the last one that enters a big market As a new ground 0 entrants, I would venture to guess you're not going to see a new 6 gs entrant in any market.

Speaker 2

The time is passing for new mobile entrance to come in just because the cost and CapEx involved in The infrastructure to begin service is so high. DISH has managed to achieve that. It may be the last one that actually creates that business and that's my intent to go Give it my absolute best shot for us to make that work. Now we have a number of DISH has a number of attributes that have not yet been Made available in a consumable way and that is the 5 gs infrastructure which in a consumer world is not as relevant That is an opportunity ahead of us that we need to focus on and make differentiation in addition to all of the things that EchoStar brings in, which is global and Has relevance when we tie them all together. Hopefully we'll disclose all of that strategy and I will be here speaking to you About how that will work as I put the pieces together, but I'm optimistic that the road ahead is Much brighter than it might look, having reached this point that all that cost has been in there, All of the expenses in there, but the revenues and other things are yet to come just by design of a new entrant into a market.

Speaker 2

Hopefully that gives you a bit of a perspective from a mindset perspective, but I can't give you any specific on your three areas. Just rest assured that they're registered in my mind and I'm not forgetting about any of them.

Speaker 6

Thank you so much, Amit, for your perspective. I really appreciate it. And good luck and thank you so much for

Speaker 2

Thank you.

Operator

I show no further questions at this time. I would now like to turn the call back to Dean Manson for closing remarks.

Speaker 1

Thank you, Michelle. We're now ready to conclude the meeting and I thank everyone for calling in.

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EchoStar Q3 2023
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